Unconsolidated Joint Ventures

6 Months Ended

Jun. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

As of June 30, 2016 and December 31, 2015, the Company had ownership interests in 12 and 14, respectively, unconsolidated joint ventures with ownership percentages that generally range from 5% to 35%. The condensed combined balance sheets for our unconsolidated joint ventures accounted for under the equity method are as follows:



	June 30,			December 31,
	2016			2015
	(Dollars in thousands)
Cash and cash equivalents	$	48,634		$	53,936
Restricted cash	12,069			12,279
Real estate inventories	399,945			415,730
Other assets	936			3,972
Total assets	$	461,584		$	485,917

Accounts payable and accrued liabilities	$	38,539		$	57,813
Notes payable	111,541			94,890
Total liabilities	150,080			152,703
The New Home Company's equity	47,353			60,572
Other partners' equity	264,151			272,642
Total equity	311,504			333,214
Total liabilities and equity	$	461,584		$	485,917
Debt-to-capitalization ratio	26.4		%	22.2		%

The condensed combined statements of operations for our unconsolidated joint ventures accounted for under the equity method are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(Dollars in thousands)
Revenues	$	70,104	$	58,186	$	112,061	$	139,410
Cost of sales	53,860		45,486		89,764		109,284
Gross margin	16,244		12,700		22,297		30,126
Operating expenses	6,049		5,063		9,961		11,723
Net income of unconsolidated joint ventures	$	10,195	$	7,637	$	12,336	$	18,403
Equity in net income of unconsolidated joint ventures reflected in the accompanying condensed consolidated statements of operations	$	3,947	$	3,256	$	3,940	$	5,124

The Company has entered into agreements with its unconsolidated joint ventures to provide management services related to the underlying projects (collectively referred to as the “Management Agreements”). Pursuant to the Management Agreements, the Company receives a management fee from its unconsolidated joint ventures based on each project's revenues. For the three and six months ended June 30, 2016 and 2015, the Company earned $2.5 million, $4.7 million, $2.1 million and $5.1 million, respectively, in management fees, which have been recorded as fee building revenues in the accompanying condensed consolidated statements of operations.

During June 2016, our LR8 Investors LLC unconsolidated joint venture (Lambert Ranch) made its final distributions and our outside equity partner exited the joint venture. Upon the change of control, we were required to consolidate this venture as a wholly owned subsidiary, and the Company assumed the cash, accounts receivable, accounts payable, and accrued liabilities, including warranty reserve, of the joint venture. In accordance with ASC 805, Business Combinations, we remeasured the assets and liabilities at fair value prior to consolidation resulting in a remeasurement gain of $1.6 million, which is included in equity in net income from unconsolidated joint ventures in the accompanying condensed consolidated statements of operations.